National Grid allocates billions of pesos for capital expenditures annually, reinvesting part of revenues to strengthen the power grid.

The company, which operates the country’s transmission network, is allowed to recover a maximum allowable revenue of P43.078 billion in 2015.

It initially received approval for a maximum allowable revenue of P41 billion for 2016 but this was adjusted by the Energy Regulatory Commission later to P43.789 billion.

ERC also approved a maximum revenue of P43.789 billion for 2017, which meant National Grid can recover P2 billion from the P41 billion initially approved in 2016 starting this year.

The P2 billion allowed recovery and ancillary charges resulted in higher transmission charge of P0.15 per kilowatt-hour in the February rates of Manila Electric Co. customers.

National Grid operates the country’s transmission network under a 25-year concession agreement signed in 2009. National Grid offered $3.95 billion for the TransCo concession when it was offered for privatization in 2007.

National Grid was granted under Republic Act 9511 the franchise to operate, maintain, manage and engage in the business of conveying or transmitting electricity through a high-voltage backbone system or interconnected transmission lines.

The consortium is comprised of Monte Oro Grid Resources Corp. led by Henry Sy Jr., Calaca High Power Corp. of Robert Coyiuto Jr. and State Grid Corp. of China as technical partner.